22 AVESCOGROUPPLC ANNUAL REPORT 2009
www.avesco.com
CORPORATE GOVERNANCE REPORT
This corporate governance report sets out how the principles identified in the Combined Code have been applied by the Company in the period. Although, as an
AIM listed company, the Company is not required to comply with the Combined Code, the Directors regard compliance as a benchmark of best practice, which
they wish to follow wherever relevant and not disproportionate having regard to the size of the Group.
Statement of compliance
The Board considers that the Company has complied substantially with the provisions of the Combined Code during the period and subsequently until the date of
this report.
The Board
The Board comprises the Directors listed on page 17. Mr Blackall and Mr Maxwell also served as Directors until their resignations on 5 March 2009.
There is a non executive Chairman and a Chief Executive Officer. Mr Gibbins, who is the Chairman, is considered to be independent of management.
Mr Murray, who is also a non-executive Director, is not considered to be independent in view of his previous involvement in an executive capacity with the Group
and his interest in the Company’s shares.
The Board is scheduled to meet at least four times each year, in addition to which meetings will also be convened on an ad hoc basis if there is urgent or
delegated business which cannot wait until the next scheduled meeting of the full Board. The following table sets out details of the number of meetings of the
Board (excluding ad hoc meetings) and of the audit and remuneration committees during the year and the attendance at those meetings:
Director Board Audit Remuneration
Total Number of meetings 622
IP Martin 6--
GP Andrews 4-
JL Christmas
DJ Nicholson 6--
MES Gibbins 622
RA Murray (1) 61
LNC Blackall (2) 111
CA Maxwell (2) 31
(1) Audit committee meetings attended since appointment on 5 March 2009.
(2) Meetings attended prior to resignation on 5 March 2009.
The Board considers the overall strategic direction, development and control of the Group and reviews the financial and operational performance. Various major
decisions require Board approval, including the approval of the annual budget, larger capital expenditure proposals, acquisitions and disposals. Board papers,
which are sent out in advance of each meeting, include a set agenda although further subjects are added for discussion as the need arises.
The executive Directors meet as a management team on a weekly basis. These executive management meetings consider and review the operational and
financial management and performance of the Group, receive reports from the managers in respect of their respective areas of responsibility, discuss significant
issues and determine any appropriate action to be taken.
The Chairman and the Chief Executive have clearly established responsibilities although these have not been defined in writing. In addition to chairing the Board
and the Audit and Remuneration Committees, the Chairman is responsible for ensuring that the Board is kept properly informed and is consulted on all issues
reserved to it. The Chairman consults with the other non executive Director on corporate governance issues, communicates the views of the shareholders to the
Board and ensures a constructive relationship between the executive and non executive members of the Board. The Chief Executive has final executive
responsibility to the Board for the success of the Group.
The Board has access to the advice and services of the Company Secretary and there is a written procedure for obtaining independent legal advice at the
Company's expense.
The non executive Directors review the performance of the executive Directors. No formal performance evaluation of the non executive Directors or of the Board
committees has been conducted.
On appointment, new Directors take part in an induction programme when they receive information about the Group, the role of the Board and the Board
committees, the Company’s corporate governance practices and procedures, and the latest financial information about the Group. They are also advised of their
legal duties as a director of a public company. Visits are arranged to Group locations together with meetings with management.
The Articles of Association of the Company require Directors to submit themselves for re-election at the first Annual General Meeting following appointment and
then every three years.
Audit committee
The audit committee comprises Mr Gibbins, who has served throughout the year, and Mr Murray. Mr Murray was appointed to the audit committee on 5 March
2009, to replace Mr Blackall and Mr Maxwell, who both served until that date. Mr Gibbins is the current chairman of the audit committee.
The audit committee reviews the Group’s annual report, financial statements, interim statements and preliminary announcements before recommending their
approval to the Board. This process involves meeting with the external auditors to discuss issues relating to the audit and financial control of the Group. The audit
committee also reviews the Company's internal financial controls and risk management systems, the scope of the audit and the independence and objectivity of
the auditors. The auditors have direct access, should they so require, to the chairman of the audit committee.
Nomination committee
The Company does not have a nomination committee. Any appointments to the Board would be considered by the Board as a whole.
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